Shares in SurfControl soared more than 27 per cent on news that the internet security software developer has been approached about a possible takeover.
The US security software giant Symantec was considered the most likely company behind the approach although SurfControl declined to reveal the identity of its suitor. It also said that it is exploring other strategic options for the business, raising the prospect of a management buyout.
Shares in the mid-cap software developer leapt to 545.50p, following its biggest gain in six years,valuing the company at more than £171m. Numis Securities analyst David Toms said it would be a surprise if a bid below 600p succeeded.
The Cheshire-based SurfControl develops software that protects corporate networks from spyware and viruses contained in e-mails and internet sites. The web security market has been consolidating rapidly over the past year and Surf-Control has often been linked with a takeover, given its relatively small size and exposure to the US market.
Patricia Sueltz, an industry veteran of US tech giants IBM, Salesforce.com and Sun Microsystems, was installed as the chief executive of SurfControl last year after a period of difficult trading. She has been credited with stabilising the business but, despite reporting a 23 per cent rise in revenue in the first quarter, losses widened to $1.2m (£611,000).
Mr Toms said: "We believe that the company would benefit from being part of a larger group."
But he warned a deal might not happen after several "false starts" in consolidating the UK tech sector this year including Misys, Northgate Information Solutions and Torex Retail.
Analysts said although private equity firms might be attracted by the group's cash-generative business model, the approach is more likely to have come from a trade buyer, given recent sector consolidation.
Symantec recently said it is interested in making acquisitions and buying SurfControl would bolster its relatively weak filtering business.Reuse content